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Globalization, privatizatio=
n and liberalization
accelerated all round reforms in many sectors, especially in developing
economies, in the world. Developing countries- like India have realized the
importance of communication in the later part of 20th century. A=
ccording
to DoT (2013), today Indian Telecommunication Sector is one of the fastest
growing telecom sectors and it has become the second largest network in the
world, next to China. The Government of India really has encouraged the tel=
ecom
sector to penetrate in the new markets across the country by adopting
appropriate policies. Therefore this sector is found to be in a growing path
and with its potential will continue to do so in the future also.Keeping these in view, the present study
analyzes the history & evolution of Indian Telecom Sector, its growth &=
amp;
developments in present scenario along with the future opportunities of the
sector in India.

1. Introduction: The Indian Telecom Sector has emerged as one of t=
he
critical components of economic growth required for overall socio-economic
development of the country as there is a positive correlation between the
penetration of mobile services and internet on the growth of GDP of a count=
ry. According
to Joshi (2014), World Bank believes that an increase in mobile and broadba=
nd
penetration increases the per capita GDP by 0.81% and 1.38% respectively in=
the
developing countries. After post-liberalization, exponential growth on Tele=
com
Sector in India can be seen, which actually helped the country for its
economical development, (Nasit, 2011). According to Earnst and Young (2011),
Indian telecom is an economic miracle in the making. They said that connect=
ing
such a vibrant economy of more than a billion people together and with the =
rest
of the globe is an extraordinary achievement in terms of a nation’s
socioeconomic development.

=
o:p>

According to Shah (2008), t=
he
development of the Telecom Sector of India has experienced a major process =
of
transformation in terms of its growth, technological content and market
structure in the last decade through policy reforms introduced by Governmen=
t of
India. The sector has undergone a dramatic transformation from the governme=
nt
monopoly to a competitive environment after liberalization, where multiple
private players could enter and started giving services to customers. Accor=
ding
to Tarab (2012), the joint effort of Government and private players of this=
sector
has improved a lot and on its way of growth and development. Active
participation of the private companies, foreign direct investment, sequence=
of reform
measures initiated by the Government and wireless technology- played an
important role in phenomenal growth of the sector in the country. It has be=
come
a very essential service, needed for rapid growth and modernization of vari=
ous
sector of the country’s economy.

2.Objectives of the study:

The objectives of the research study=
are-

<=
span
lang=3DEN-IN style=3D'font-family:"Times New Roman","serif";mso-fareast-fon=
t-family:
"Times New Roman"'>1.To
study the history and evolution of the Telecom Sector in India.

3. Methodology: It is based on secondary data
collected from the Department of Telecommunication, TelecomRegulatory Authority of India, Ministry of Communication, the
reports from Government of India and other sources. In order to study the
specified objectives, statistical tool like year-wise Percentage of market
share of different service provider, annual growth rate and percentage were calculated.

4=
b>. Discussion:This study has=
been
drafted to portray the history & evolution, present trends and future
opportunities in the telecom sector of India. Here, the researcher has also
discussed about- Growth of Telephones, Tele-density, Public Vs Private tele=
com
sector, Wireless Vs Wire-line segments, Service providers and their market
share etc. It has been seen that the Telecom Sector of India has registered=
a
phenomenal growth during last few years, propelled largely by the unprecede=
nted
growth of the mobile telephony and infrastructure which not only is benefic=
ial
for the telecom sector but has a multiplier effects over the entire economy=
.

=
4:1 History
of Indian Telecom Sector: The
history of Indian Telecom Sector began in 1851, when The British Government
were laid down the first operational landlines in Kolkata, (Tarab, 2012). In
1881, a separate telephone services were introduced by opening telegraph
facilities to the public. The telephone services were merged with the postal
system in the year 1883.In the
beginning, Rajdhani of East India Company was situated at Kolkata; but in t=
he
year 1911, the capital got shifted to Delhi and continued to be capital of
India. At that time, Public Works Department (PWD) was running the function=
s of
telecom operations with head office at New Delhi. Gradually the control of
telecom operations transferred to Director General Postal and Telegraph
(DGP&T) from PWD, from DGP&T to Department of Telecommunication (Do=
T),
from DoT to Department of Telecom Service (DTS), and finally landed in Bhar=
at
Sanchar Nigam Limited (BSNL). All these years, New Delhi continued to be the
head office of Telecom Sector.

In the year 1923, Indian Ra=
dio
Telegraph Company (IRT) was formed. In the year 1947, just after the
independence, all the foreign telecommunication companies were nationalized=
to
form Telephone, Telegraph and Post (PTT), which was run by the Government of
India, under Ministry of Communications in a monopoly manner. To get better
performance, Government decided to bring the Indian Telecom Sector under the
roof of state’s control. In 1980, private sector was allowed in manufacturi=
ng
telecom equipment’s, which initiated reforming the telecommunication sector=
.

4:2
Evolution of the Telecom Industry -Important Milestones:

=

1984

Manufacturing of subscriber termin=
al
equipment opened to private sector.

1985

Telecom was constituted into a
separate department with a separate board.

1986

MTNL and VSNL created as corporati=
ons.

1988

Government introduces in-dialling
scheme. PABX services only within a building, or in adjoining buildings.<=
b>

4:3:1 Growth of
Telephones: Infrastructural
development of the country plays an important role in the development of
Telecom Sector of India. The Government of India is providing certain benef=
its
especially to infrastructure companies and also encouraging the private pla=
yers
to participate through investment in this sector. As a result very good gro=
wth
in this sector can be seen in the country.

The
table shows there is positive growth in case of wireless and slight negative
growth in case of wire line telephones.

Chart1:Growth of telephones over years

So=
urce:
DoT, Annual Report 2010-11 and Annual Report 2013-14

From the above line graph it is refl=
ected
that there is a positive percentage growth of number of total telephones ov=
er
previous years, except in the year 2012-13 which was due to the removal of
inactive mobile telephone connections by the service providers.

<=
/span>

4:3:2 Market P=
otentialities:
India
has become one of the fastest growing mobile markets in the world. In India,
the mobile service was commercially launched in August, 1995. In first few
years, the average monthly subscriber’s additions were around 0.05 to 0.1
million only and total mobile subscribers base in December 2002 was 10.5 mi=
llion,
(Annual Report, DoT 2002-03). However, subsequent Annual reports reflect th=
at in
the year 2003-04 and 2004-05, the numbers of mobile subscribers’ additions
increased to around 2 million per month due to number of proactive initiati=
ons
taken by the regulators and licensors. The total number of telephone
subscribers has reached 922.04 million at the end of January, 2014. The ove=
rall
tele density has increased to 74.50 in January, 2014. The total wire line
subscription and wireless subscription has reached to 28.72 million and 893=
.31
million respectively. In the last few years, along with the growth of mobile
subscribers, there is an exponential growth in case of subscriber base of F=
ixed
line services as well as Internet services. Thus building on the growth tre=
nd
in subscriber base experienced since 2000.

4:3:3
Tele-densities: Te=
le-density
is an important indicator of telecom penetration in the country, which
represents the number of telephone per hundred populations. There is a very exponential growth of tele-density in our count=
ry due
to evolution of hi-tech wireless technologies.

The Tele-density of March 2004, whi=
ch was
7.02% has increased up to 53.46% in March, 2010 and further raised up to 74=
.5%
in January’2014.

Graph 2: Trends in Tele-density from 2007 to 201=
4.

<=
/b>

Source: DoT Annual Report 2013-14

=

=
According
to DoT Annual Report (2013-14), at the end of financial year 2014, India’s
tele-density has increased to 75.23% from 73.32% as on April 2013. During t=
his
one year period, there is a declination in urban tele-density; however rural
tele-density has increased. The urban tele-density registered a decline from
146.64% to 145.46% and rural tele-density increased from 41.05% to 44.01%.<=
o:p>

=
Rapid
increase in rural tele-density is very important for the economic and social
development of rural areas, which then influence the overall development of=
the
country. India Government has adopted various measures for the spreading ou=
t of
mobile network in distant rural areas. Private telecom service providers al=
so
trying very hard for the expansion of rural tele-density by providing good
services in those remote areas, as urban areas already has got saturated.

4:3:4
Public Vs Private: There
is a continuous rise in the number of wireless telephones of the private se=
ctor
operators compare to public sector in Indian Telecom sector in last decade.=
The
total number of telephones of the private sector is 812.96 million, whereas=
in
public sector it is 120.05 million at the end of the March 2014.

=
The
percentage share growth of wireless public and wireless sector for last four
years has given below.

Table 3: Growth of public and private wireless
telephone percentage share in last four years

Sr. No.

Segment

March’2011

March’2012

March’2013

March’2014

1.

Public

14.89

13.69

14.49

12.87

2.

Private

85.11

86.31

85.51

87.13

Source: DoT Annual Report, 2013-14

Chart 4: Number of Wireless Telephone in Public =
and
Private Sector

=
u>

Source: DoT Annual Report, 2013-14

From the chart, it can be explained=
that
the number of wireless telephone connections in private sectors are increas=
ing
day by day, whereas it is gradually decreasing in public sector. In wireless
telephone, private sector now dominates the Indian Telecom Sector.

4:3:5
Wireless Vs. Wire line: In
the Telecom Sector of India, while the wireless telephones continued to gro=
w,
the wire line telephones are declining day by day. The number of wireless
telephone is 904.52 million, whereas the wire line telephone is 28.50 milli=
on
at the end of March 2014.

Table 4: Percentage share of wireless and wire l=
ine in
last four years

Sr. No.

Segment

March’11

March’12

March’13

March’14

1.

Wireless

95.90

96.62

96.64

96.95

2.

Wire line

4.10

3.38

3.36

3.05

Source: DoT Annual Report, 2013-14.

=
span>

=
While
noticing the percentage share of wireless and wire line telephone in last f=
our
years, it can be seen that there is a positive growth in wireless and negat=
ive
growth in wire line telephones.

Chart 5: Percentage share of wireless and wire l=
ine in
last four years

Source: DoT Annual Report, 2013-14

4:3:6
Broadband: Existen=
ce of
Broadband connectivity is really an integral driver for the improvement of =
socio-economic
performance of the country. This service enables to give guidance to
individuals make them aware of many things like- accessing new career and
educational opportunities.

=
Government
is trying to provide the Broadband facilities in rural and remote places, w=
hich
will help to bridge the gap between the development of rural and urban areas
which is very much essential for the overall development of the country.

4:3:7
Foreign Direct Investments:

The rapid growth and development of Telecom Sector of India is
motivating major global players to invest their money in this sector. Due to
privatization, liberalization and globalization, Foreign Direct Investment =
in
India has been really increasing especially in the last decade. On
August’2013, Government raised FDI limit for telecom services to 100% from =
74%,
to attract the inflow of FDI. By doing this, Government of India is trying =
to
make the Telecom sector more attractive and investor friendly for others. D=
ue
to the existence of FDI in Telecom Sector of India, there is an opening for
advanced technological skills, availability of huge amount of funds in the
market, worldwide market competition etc. So, it has become a challenging t=
ask
to maintain the balance between economic gains from foreign investment and
national telecommunications sovereignty.

4:3:8
Tariffs: According=
to
Department of Telecommunication, today in India, the telecommunication serv=
ice
is one of the lowest in the world. The consumers in the Indian market have
immensely getting the benefits from such lower tariffs which is a major rea=
son
for explosive growth in this sector, (Nasit, 2011). Related to tariff-setti=
ng,
TRAI had issued its first directive for re-balancing tariffs. Consequently,=
it
conducted periodic reviews to make changes in the tariff levels whenever fo=
und
necessary.

4:3:9Mobile
Number Portability: Mobile
Number Portability requests have been increased day by day. About 111.94
million subscribers have been submitted their requests to different service
providers present in that particular area, for porting their mobile number.
Till now maximum number of requests have been received in Rajasthan from MNP
Zone-I and in Karnataka from MNP Zone-II.

4:3:10
Mobile Service Providers of India: There are many mobile network operators in India=
having different subscriber’s ba=
se and
so market share. A table have given below showing their subscribers base and
market share as on January’ 2013 and January’2014.

Table 5: Market share of different mobile service
providers as on January’13 and January’14.

Sl. No.

Operator’s Name

Market share

January’2013

Market share

January’2014

1.

Bharti Airtel

21.35%

22.48%

2.

Vodafone India

17.2%

18.16%

3.

Idea Cellular

13.49%

14.58%

4.

Reliance Communication

13.71%

13.17%

5.

BSNL India

11.62%

10.60%

6.

Tata Docomo

7.85%

7.07%

7.

Aircel

7.14%

7.66%

8.

Telewings

----

3.80%

9.

Sistema

1.66%

1.06%

10.

Videocon

0.26%

0.47%

11

MTNL India

0.60%

0.39%

12.

Loop Mobile

0.35%

0.33%

13.

Quadrant

----

0.23%

14.

Unitech

4.65%

----

15.

HFCL

0.18%

----

100

Source: TRAI, Press Release, Year-2013 and 2014<=
o:p>

Bharti Airtel, Vodafone India, Idea=
and
Reliance Communication have secured 1st, 2nd,3rd=
and 4thrank as long as
market share is considered on January’2014

<=
/p>

Chart 7: Market share of Mobile service provider=
s of
India

<=
span
style=3D'mso-spacerun:yes'>

Source: TRAI, Press Release, Year 2014

4:4
Future Growth Opportunities of Indian Telecom Sector: According to TRAI, two other associ=
ated
aspects for market growth are- availability of spectrum and availability of
resources for network development and expansion. According to the report of
Department of Telecommunication, Government of India has raised the Foreign
Direct Investment (FDI) limit for this sector to hundred percent on August’=
2013
to ensure continuous flow of investments to expand the reach of mobile
operators. Telecom operators are working on a segmented approach to know the
market potential and then to achieve their forecasts and target. According =
to
DoT (2013-14), Department of Telecommunication is planning to serve the nat=
ion
in its diversity, modern telecommunication facilities will be facilitated to
all the rural and remote corners of the country. In this regard, telecom se=
ctor
will give special focus on unreserved areas in North-Eastern region and
backward states of the country. At the same time, an all-inclusive legislat=
ion
is required to encourage healthy competition, simplify processes and
procedures, stimulate innovation and build linkages with other upcoming sec=
tor
with the help of facilitating rapid growth of the economy by using
communication technology.

3.Conclusion:
It can be conclude=
d that
the growth and development of Telecom sector of India has made it a key
contributor in India’s economic and social up gradation. Every functional
division and service provider of Telecom Sector of the country is trying to
provide world class telecom infrastructure in its area of operation to give
services to its customers and so, helping the country to progress in the gl=
obal
scenario.